JPY And AUD Slip as The U.S. Tariffs on Chinese Goods Approach

The Chinese yuan fell, while the Aussie dollar also slipped on Friday as traders remained anxious over reports that the Trump administration could place tariffs on an additional $200 billion worth of Chinese goods as soon as today.

According to the CNBC report this week the China’s top leaders are prepared let its currency weaken in order to support its exporters amid escalating trade dispute with the U.S., although Beijing would try to avoid depreciation in the USD/CNY pair beyond the key 7 level.

As Mr. Koon How Heng (head of markets strategy at UOB) said, the USD/JPY exchange rate “may well be capped around current levels just above 6.80, ahead of the October half-year review of FX practices by the U.S. Treasury… But the bias for the medium term remains that of [yuan] weakness as long as there is no clear resolution of U.S. – China trade conflict.”.

Meanwhile, the AUD/USD pair slid 0.5% to 0.7150. The AUD slumped 3% in the past month, and this week dropped to 71.45 U.S. cents, the lowest since May 2016.

TheUSD/JPY pair slipped over reports that the U.S. President Donald Trump hinted that he may take trade fights to Japan.